DCA: Second year with high prices

Historically low potato harvest in the EU-15

The chip potato market has all the ingredients to realise a high price. For the second year in a row, the price is between 19 and 24 Euro. This is DCA's conclusion in its analysis of the price development of potatoes for the season 2013/2014.

Judging by international and local test harvests, satellite images, information from the field from various European authorities, everything points to a below average potato harvest. The latest estimate assumes a total volume of 26 million tonnes of seeding and consumption potatoes in Europe. This is comparable to the 2012 harvest.

That lead to a good potato year and the season 2013/2014 may follow this line. DCA predicts a price between 19 and 24 Euro. In this the fine Bintje is the lower limit and the coarse Innovator is the top of the market in the rest of Europe.

Besides supply, another factor is having an increasingly large influence on the potato price: the chip market. Industries are trying to secure the growing processing capacity with set price contracts. This is causing a higher contract price and lessened activity on the free market. Other market parties, such as exporters, are expected to find it more difficult to get cheap potatoes. The demand for free potatoes is an important factor in the price development, but will also lead to an increased price volatility.

A second, consecutive expensive year is unique, but can also threaten the chip sales outside of Europe and so the physical day to day price of potatoes. That's why the (termijnmarkt?) this year could be a good sales instrument, say DCA market annalists. Processors have contracted enough and the sales behaviour of exporters remain unpredictable.

Source: DCA

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